BIOTECHS GET CRUSHED: Here's what you need to know

Stocks reversed a big rally on Friday. Biotechs dragged the
Nasdaq lower and the S&P 500 dipped into the red,
while the Dow was held afloat mostly by an 8% rally in Nike
shares.

All three indexes closed down for the week.

First, the scoreboard:

Dow:16,314.67,
+113.35, (0.70%)

S&P 500: 1,931.34, -0.90, (-0.05%)

Nasdaq: 4,686.50, -47.98, (-1.01%)

And now, the top stories on Friday:

The US economy grew in the second
quarter better than previously reported. The third and final
estimate of Q2
gross domestic product (GDP) was 3.9%, compared to the
prior reading and consensus forecast of 3.7%. GDP was lifted by
consumer spending on healthcare, food services, and
accommodation. Second-quarter consumption was revised to 3.6%
from 3.1%. "Our bet is on the consumer,"
wrote Chris Rupkey at Bank of Tokyo-Mitsubishi in a note
to clients. "The larger picture remains the
same, growth remains on track and the economy's positive,
steady performance gives the Federal Reserve the confidence it
needs to raise interest rates later this
year."

In other data, the
University of Michigan's consumer confidence index rose to
87.2 in September, better than the forecast for 86.5 and up
from 85.7. The report said sentiment was boosted because
consumers realized that the stock market sell off in August had
more to do with international weakness than with the domestic
economy. However, they also now believe that what happens
abroad has a real impact on their wage and employment
prospects, according to the survey's chief economist Richard
Curtin.

Markit's flash reading of the US
services purchasing manager's index was 55.6 for September.
Business activity gained at the slowest pace in three-months,
as entrepreneurs became less confident in the economy's
prospects.

Nike
shares surged 8% to an all-time high. On Wednesday, the
company reported strong quarterly earnings results, with
adjusted earnings per share of $1.34 on revenues of $8.4
billion – both higher year-over-year and past consensus
estimates. The stock's gain added about 60 points to the Dow –
all of its rally for a few minutes during the session.

The US oil
rig count fell for a fourth straight week this week, by 4
to 640. It was the slowest pace of declines in this streak.
Driller Baker Hughes reported that the combined count of oil
and gas rigs fell 4 to 838.